The past year revealed many kinks in our supply chains—particularly our far-flung global supply chains. That has managers rethinking the wisdom of sourcing products so far from their end-users, with all the complications that entails, and exploring the idea of bringing manufacturing back to U.S. shores.
But that raises some questions: Are we ready? Is the U.S. prepared to rebuild the broad manufacturing base—and the supporting workforce—it lost to Asia decades ago? And what will it take to get us there?
To find out, Diane Rand, managing editor of DCV’s sister publication, Supply Chain Quarterly, recently spoke to Rosemary Coates, executive director of the Reshoring Institute, a nonprofit that provides resources to companies looking to bring manufacturing back to the U.S. The interview, which was conducted for “Supply Chain in the Fast Lane,” a podcast coproduced by Supply Chain Quarterly and the Council of Supply Chain Management Professionals (CSCMP), concludes our three-part series on finding and retaining a first-class workforce.
Q: Given the supply chain disruptions we’ve experienced over the past few years, more and more companies are considering reshoring manufacturing and production. But that has raised concerns about labor—specifically, whether the U.S. can provide enough skilled workers to support those operations. How valid a concern is this?
A: I think that is very valid. In the early 2000s, we started moving production offshore to China, and with it went the entire supply chain—so all the suppliers and so forth ended up in China as well. Because we lost so much production during that period, we also lost skill levels in things like tool and die making along with trained electricians and welders. These are trades that were minimized during this period, so now, as we are bringing manufacturing back and rethinking how we manufacture, we need to retrain people for these specialized jobs. I think we’re going to limp along for a couple of years until we get that done.
Q: How can we overcome these labor-related challenges and make reshoring a reality?
A: I think there are needs and opportunities across the board, from entry-level manufacturing jobs all the way up to executive-level positions in manufacturing and supply chain. I believe part of the problem, though, is that politicians—and a lot of our policies—are focused on jobs, jobs, jobs, when actually the problem is training and education. We need to focus more on education so that we’ll have a trained workforce that can step into a manufacturing environment. I think that [burden] is going to mostly land on the shoulders of community colleges throughout America.
We have a wonderful system of community colleges that now offer courses that are a crossover between basic manufacturing and engineering. Most manufacturing jobs now require mathematics skills, expertise in computer operations, and an understanding of robotics. They’re not fully engineering jobs but they’re not basic manufacturing jobs either—they’re somewhere in between. The community colleges are smack dab in the middle of that space, and I think they’re going to pick up the burden and get people trained over the next couple of years.
Q: Beyond working with community colleges, what are some best practices you’ve seen in terms of training potential workers?
A: We know there were a few disasters that occurred because companies decided to bring manufacturing back but didn’t give much thought to where they’d find the skilled labor they’d need. They limped along until they could develop a trained workforce.
I think the best practices are to focus not just on training but also on planning ahead: What skills am I going to need for my specific operation, whether it’s a factory or a warehouse? How do I work with my local educational institutions to produce workers who can fill those roles?
Then the other thing is that many cities and states are now providing educational incentives and will reimburse companies for getting people trained.
So, we are all moving in the right direction. It’s just that you can’t just snap your fingers and expect it to be done. It is going to happen over time.
Q: Can technology and automation alleviate some of these labor shortages in the near term, and are they viable alternatives in manufacturing and distribution?
A: Absolutely. Automation is the key because through automation you can extract labor costs. As you know, we have high labor costs in the U.S.—if we were to go head to head [with other countries] on labor costs, we couldn’t compete. To solve that problem, you have to implement technology and extract that labor cost.
You can get capital investment money, and there are ways to automate and re-engineer your production line, but you have to train the workers so that instead of putting pegs in holes, they’re now running robots that put pegs in holes. Those are different skill sets. Learning to run robots and operate machine tools and so forth requires higher-level skills. These are also higher-paying jobs and essential to rebuilding the middle class in America.
Q: Let’s say someone wanted to switch careers and find a job in the supply chain. They need training. On average, how long does it take to develop the needed skills?
A: I think of it as a continuum. If you are looking to fill, say, a warehouse job, it’s no longer going to be just carrying boxes around. In today’s environment, a warehouse job is more likely to entail running the robots that go and pick items off the shelves and place them in line for shipping. That is a different level of skill. For that type of job, it’s probably an 18-month to two-year training and career path at either a community college or a technical training school.
But if you looked up the continuum at jobs for supply chain professionals who help run the global business, that typically requires a four-year degree. There are many great programs out there, and they’re offered at universities all across America.
Then on top of that, we also have a need for strategists—typically MBAs or people with a master’s degree in engineering—who can think globally about the strategic aspects of supply chain management.
Q: Thank you. As a mom of kids who are heading off to college, I’m always telling them about this industry, how amazing it is, and the many opportunities it offers.
A: It’s funny you should say that. I have a grandson who just graduated from the University of Kentucky. While he was in business school working on a management and marketing degree, I kept urging him to take a supply chain class, but he was reluctant. Finally, he did, and he was like, “Wow, this is really interesting, Grandma.” Now he is looking for a job in supply chain.
I would agree that supply chain is interesting. It’s also very global in nature and often provides opportunities to travel around the world. Plus it’s complex and technology-driven. It’s got all the kinds of goodies that you would look for in a new job.
Q: What are some common misconceptions about the current labor pool in North America?
A: I think companies understand that there’s a labor shortage. We can’t find skilled workers, and it’s particularly difficult in rural areas.
I think the bigger divide that we have to cross is more instructional—that is, making politicians understand that this is not just about creating jobs; it’s about developing a skilled, trained labor force. The money and emphasis should be put on training to fill those open jobs now and in the future.